When evaluating fractional real estate investment platforms, investors face a critical decision: balancing accessibility, control, and long-term value. For those seeking to build wealth through U.S. rental properties without the burdens of landlordship, the choice between RealT, HoneyBricks, and Ark7 can be pivotal. RealT’s blockchain approach is inaccessible to U.S. residents, and HoneyBricks was acquired in 2024, leaving Ark7 as the compelling choice for American investors. By offering direct ownership in high-yield rental homes with a minimum investment as low as $20 per share, Ark7 provides a uniquely accessible, transparent, and fee-efficient path to passive real estate income. This comprehensive guide examines the key differences between these platforms to help you make an informed decision.
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Explore Ark7 OpportunitiesKey Takeaways
- Ark7 is the optimal choice for U.S. investors, offering SEC-qualified fractional shares in individual rental properties with a $20 minimum, zero annual AUM fees, and monthly cash distributions.
- RealT is currently unavailable to U.S. residents and operates using cryptocurrency, which involves additional considerations such as transaction fees and price volatility.
- HoneyBricks is no longer an independent platform, having been acquired by EquityMultiple in April 2024, effectively removing it from the competitive landscape for new investors.
- Fee structure significantly impacts long-term returns; Ark7’s zero ongoing AUM fee can save investors $700-$1,000+ over a decade compared to competitors with annual percentage-based fees.
- For true accessibility and control, Ark7’s combination of low minimums, individual property selection, and simple 1099 tax reporting provides a superior user experience for building a diversified real estate portfolio.
Understanding Fractional Real Estate Investing: A Primer for Beginners
Fractional real estate investing allows individuals to purchase shares of a property, sharing in its rental income and potential appreciation without the responsibility of managing it. This model democratizes real estate, an asset class historically reserved for wealthy investors or those willing to take on significant debt and management duties. By pooling capital from many investors, platforms can acquire high-quality properties and distribute the benefits proportionally. For beginners, this offers a turnkey path to passive income and portfolio diversification.
The core appeal lies in accessibility and diversification. Instead of needing $50,000 or more for a down payment, investors can start with a small amount and spread their capital across multiple properties and markets, reducing risk. This is where a platform like Ark7 shines, as it allows you to invest in rental homes, making real estate investment accessible to everyone, regardless of their capital position.
What is Fractional Real Estate?
In a fractional model, a legal entity (like a Series LLC) is created for a specific property. Investors buy shares of this entity, becoming partial owners. Their investment is directly tied to the performance of that single asset, not a pooled fund. This provides transparency and direct exposure to the property’s cash flow and value. Unlike Real Estate Investment Trusts (REITs), which are often pooled and can be highly correlated to the stock market, direct fractional ownership offers a more pure play on the underlying real estate.
Benefits of Diversification in Real Estate
Diversification is a cornerstone of sound investing, and fractional ownership makes it practical in real estate. By purchasing shares in multiple properties across different geographic markets, investors can mitigate the risk associated with a downturn in any single location. For example, an investor could hold shares in a property in the high-growth Sunbelt region of Atlanta and another in the established market of Dallas. If one market softens, the other may remain stable or continue to grow, balancing the overall portfolio performance.
Real Estate Crowdfunding: How Do Platforms Work?
Real estate crowdfunding platforms act as intermediaries between property sponsors and individual investors. They handle the complex process of property sourcing, due diligence, acquisition, and legal structuring, then offer shares of these assets to their user base. The platform also typically manages the property post-acquisition, handling tenant placement, maintenance, and rent collection, then distributing the net income to shareholders.
A robust platform is defined by its operational transparency, rigorous property underwriting, and seamless user experience. Investors should have clear access to all financial and legal documents for each property, a transparent fee structure, and a simple process for buying and managing their shares. The Ark7 Mobile App exemplifies this, providing a convenient way for investors to discover curated properties, purchase shares, and track their monthly dividends from their mobile device.
The Mechanism of Online Real Estate Investing
The process typically begins with the platform identifying a promising property that fits its investment thesis. After thorough due diligence, the property is listed on the platform with a detailed offering circular. Investors can review all documentation, ask questions, and decide to purchase shares if it aligns with their goals. Once the offering is fully subscribed, the property is acquired, tenanted, and begins generating rental income, which is distributed to shareholders according to their ownership stake.
Key Features of a Robust Crowdfunding Platform
A high-quality platform offers more than just a marketplace. It provides a full-service experience, including professional property management, clear and consistent communication, and tools for investors to monitor their portfolio. Crucially, it must operate with full regulatory compliance and transparency. Ark7’s commitment to this is evident in its “Access Operation Transparency” philosophy, where complete legal and financial disclosure is accessible 24/7, ensuring investors can make confident financial decisions based on clear information.
RealT vs HoneyBricks vs Ark7: Accessibility and Minimum Investment
The barrier to entry is a critical factor for new investors. A low minimum investment allows for greater portfolio diversification and makes the asset class accessible to a wider audience.
RealT requires investors to purchase tokens using cryptocurrency, with a typical entry point of around $10-$50. However, this accessibility is moot for U.S. investors, as RealT explicitly blocks access as of 2025. The requirement to manage a crypto wallet and pay variable gas fees adds significant complexity.
HoneyBricks, prior to its acquisition, was known for its high minimum investment, typically starting at $5,000. This placed it out of reach for many retail investors looking to get started or build a diversified portfolio on a budget.
Ark7 stands out by offering shares in curated high-yield rental properties starting at $20. This low barrier to entry, combined with its focus on the U.S. market and use of traditional banking (ACH), makes it the most accessible option for American investors. This aligns perfectly with Ark7’s mission to make real estate investment accessible to everyone.
Understanding Investment Strategies with RealT, HoneyBricks, and Ark7
Each platform has a distinct investment philosophy that shapes the type of properties it offers and the returns it targets.
RealT focuses on international, often European, properties and leverages blockchain for its transactions. Its strategy is built around the DeFi ecosystem, offering weekly income in stablecoins. Its reported gross yields of 9-16% are higher, but these come with the aforementioned crypto complexity and are not available to U.S. investors.
HoneyBricks, before its acquisition, specialized in institutional-quality multifamily properties in the U.S., targeting stable, long-term returns. However, its future investment strategy is now under the umbrella of EquityMultiple.
Ark7 focuses on acquiring and managing high-yield, single-family and townhome rental properties in strong U.S. markets like Atlanta, Dallas, and Tampa. The strategy is to provide investors with a combination of stable monthly cash flow and long-term appreciation. This is demonstrated by the performance of properties like Dallas-S8, which yielded +6.51% in a recent period. Ark7’s approach is to “side with the many,” making high-quality real estate investing a community-driven, accessible endeavor.
Evaluating Returns and Passive Income from Your Real Estate Investments
The primary appeal of rental real estate is the generation of passive income. The frequency and structure of these distributions are key considerations.
RealT distributes income weekly in the form of stablecoins. While the frequency is high, the requirement for a crypto wallet to receive and manage these payments adds a layer of friction for non-crypto-native investors.
HoneyBricks and many of its peers, like Fundrise and Arrived Homes, distribute income on a quarterly basis.
Ark7 provides a significant advantage with monthly cash distributions. These payments are deposited directly into the investor’s account on the 3rd of each month, providing a predictable and frequent income stream. This allows for better cash flow management and more frequent opportunities for reinvestment, which can accelerate portfolio growth over time. The platform’s focus on professionally managed properties ensures that these distributions are stable and reliable.
Transparency and Fees: What to Expect from Investment Platforms
Hidden fees can silently erode investment returns over time. A transparent and fair fee structure is non-negotiable for a trustworthy platform.
RealT‘s primary costs are variable gas fees associated with blockchain transactions, which can be unpredictable and significant during periods of high network congestion. Its complex crypto structure also leads to complicated tax reporting involving both crypto transactions and foreign real estate K-1 forms.
HoneyBricks‘ fee structure is no longer independently available due to its acquisition.
Fundrise, a major competitor, charges an ongoing annual fee of approximately 1% (0.85% asset management fee + 0.15% advisory fee). Over a 10-year period on a $10,000 investment, this can amount to extra $700-$1,000 in costs compared to a zero-fee model.
Ark7 charges a one-time 3% sourcing fee at the property level and, crucially, charges 0% annual fees. This means your entire investment, minus the initial fee, is working for you, maximizing your long-term compounding potential. Furthermore, all tax reporting is simplified to a standard 1099 form, making tax season much easier for investors and their accountants.
Liquidity and Secondary Markets for Fractional Real Estate
Real estate is inherently an illiquid asset. However, some platforms offer solutions to provide investors with an exit strategy before a property is sold.
RealT offers immediate liquidity through Decentralized Exchanges (DEXs) like Uniswap, as its tokens can be traded peer-to-peer instantly. Again, this is only accessible to non-U.S. investors.
HoneyBricks‘ liquidity options are now dictated by its new owner, EquityMultiple.
Fundrise offers a limited quarterly redemption program, which is not a true open market and can be suspended.
Ark7 provides a regulated secondary market option. After a 1-year minimum holding period, investors can sell their shares on the PPEX ATS, an SEC-registered Alternative Trading System. As of August 2025, 70% of properties trade on this secondary market, providing a significant degree of liquidity that is rare in the direct real estate space and far earlier than the typical 5-7 year holding period.
Utilizing IRAs for Real Estate Investments with Crowdfunding Platforms
Using retirement accounts to invest in real estate can provide significant tax advantages, allowing your investments to grow either tax-deferred (Traditional IRA) or tax-free (Roth IRA).
RealT offers limited IRA options, and its crypto-based structure complicates the process for most custodians.
HoneyBricks‘ IRA offering is now part of EquityMultiple.
Ark7 provides a straightforward path to invest your IRA funds in real estate through a partnership with Inspira Financial Company, a qualified custodian. You can open a Traditional or Roth IRA directly on the Ark7 platform. The fee structure is investor-friendly: there is no platform fee to open an account, and the annual custodian fee is $100 per property, capped at $400 per year, and waived entirely if your account balance exceeds $100,000. This allows you to use your retirement savings to build wealth through tangible, income-producing assets.
Regulation and Compliance in Real Estate Crowdfunding
Investing in private securities carries risk, so regulatory oversight is crucial for investor protection.
RealT operates its tokenized properties outside the U.S. regulatory framework, which is why it is not available to American investors.
HoneyBricks was a Reg D 506(c) issuer prior to its acquisition.
Ark7‘s offerings are qualified under SEC Regulation A+, which allows it to be available to both accredited and non-accredited U.S. investors. The platform’s broker-dealer of record is Dalmore Group LLC, a FINRA and SIPC member firm, adding another layer of regulatory oversight and security. This commitment to compliance and its status as an Accredited Business provide peace of mind for investors.
Reading Reviews and Community Feedback: Real Estate Investing Reddit and Beyond
User experience and community trust are vital indicators of a platform’s quality and reliability. A strong, active investor community often reflects a company’s commitment to its users.
RealT has a dedicated international community, but its exclusion of U.S. investors limits its relevance for the American market.
HoneyBricks received praise for its transparency before its acquisition, but its community is now part of a larger platform.
Ark7 has built a strong reputation among its U.S. user base. On Trustpilot, it maintains a solid 4.2 out of 5 rating based on 243 reviews. Common positive themes in reviews include the platform’s ease of use, the low minimum investment, and the reliability of its monthly dividend payments. This active, engaged community is a testament to Ark7’s “Invest in rental homes – share by share” philosophy and its commitment to building a mutually beneficial business model with its investors.
Frequently Asked Questions
Can I use my IRA to invest in real estate through these platforms?
Yes, but the process and fees vary by platform. Ark7 offers a streamlined IRA investment option with a transparent fee structure of $100 per property per year, capped at $400 annually. RealT’s crypto-based model makes IRA investing complex and limited, while HoneyBricks’ IRA offering is now managed under EquityMultiple’s structure. For most U.S. investors, Ark7 provides the simplest path to incorporating real estate into retirement accounts.
How liquid are fractional real estate investments on these platforms?
Liquidity varies significantly across platforms. RealT offers immediate liquidity via decentralized exchanges but only for non-U.S. investors, while Fundrise offers a limited redemption program that can be suspended. Ark7 provides a regulated secondary market through PPEX ATS where investors can sell shares after a 1-year holding period, with 70% of properties actively trading. This offers a meaningful exit option earlier than the typical 5-7 year holding period common in direct real estate.
What kind of fees should I expect when investing with RealT, HoneyBricks, or Ark7?
Fee structures differ considerably and impact long-term returns. RealT charges variable gas fees that can be unpredictable, while HoneyBricks’ fees are now determined by EquityMultiple. Ark7 charges a one-time 3% sourcing fee and zero annual AUM fees, which can save investors hundreds or thousands of dollars over time compared to competitors with percentage-based annual fees. Simple 1099 tax reporting on Ark7 also reduces accounting complexity and costs.
Are these real estate crowdfunding platforms regulated by the SEC?
Regulatory oversight varies by platform. Ark7’s offerings are qualified under SEC Regulation A+, making them available to all U.S. investors with full regulatory oversight and transparency. RealT operates outside the U.S. regulatory framework, which explains its unavailability to American investors. HoneyBricks was a Reg D issuer before its acquisition, with its current regulatory structure now under EquityMultiple’s management.
How does fractional ownership lead to passive income?
Fractional ownership entitles you to a proportional share of the net rental income generated by the property. The platform handles all property management tasks including tenant placement, rent collection, and maintenance, removing the burdens of active landlordship. On Ark7, this results in monthly cash distributions paid directly to your account on the 3rd of each month. This hands-off approach allows investors to earn passive income without the time commitment or expertise required for traditional property ownership.
